Korean card issuer Shinhan Card and two subsidiaries of Japan's SBI Holdings are preparing to explore yen-backed stablecoin payments between the two countries, according to an announcement from SBI Holdings. The planned exploration targets payment use cases for Japanese visitors in South Korea.

The SBI group's counterparts in the initiative are SBI VC Trade, the group's licensed crypto asset exchange, and SBI XDC Network, its unit associated with the XDC Network blockchain. The grouping brings a South Korean card issuer, a licensed Japanese crypto asset exchange, and a blockchain-focused unit into a single cross-border initiative.

Background: Yen Stablecoins and Japan's Regulatory Framework

Yen-backed stablecoins are digital tokens designed to hold a fixed value against the Japanese currency, enabling value to cross borders without repeated currency conversion. Japan created a dedicated legal framework for fiat-backed stablecoins through amendments to its Payment Services Act that took effect in 2023, under which issuance is limited to licensed entities such as banks and trust companies, with distribution handled by registered crypto asset service providers.

SBI VC Trade operates as a registered crypto asset exchange within that framework and is one of the active venues in Japan's digital asset market. The XDC Network is a layer-one blockchain whose applications have centered on trade finance and cross-border settlement, a profile that aligns with the cross-border payment use cases at the center of this exploration.

Settlement between Japan and South Korea ordinarily runs through card networks and correspondent banking channels, which involve currency conversion fees and settlement delays. Card purchases by Japanese visitors in South Korea fall within that flow, with each transaction crossing the yen-won conversion step. Stablecoin-based payment rails are generally pursued as a way to shorten settlement and reduce per-transaction costs for cross-border flows such as these.

Scope of the Announcement

The announcement did not disclose technical or commercial specifics of the exploration, such as launch timing, pilot scope, or the settlement architecture to be used. Shinhan Card is one of South Korea's largest card issuers, operating under Shinhan Financial Group, one of the country's major financial holding companies. Until such details emerge, the initiative remains at an exploratory stage, and any indication of movement toward a pilot would come from subsequent disclosures by the companies involved.

This article was first published by COINOTAG: Shinhan Card and SBI Units Explore Yen Stablecoin Payments for Japanese Visitors in South Korea